UPDATE 1-Canadian home prices rose 0.7 pct in July from June -Teranet

TORONTO Aug 14 (Reuters) - Canadian home prices rose in
July from June to an all-time high, but the modest monthly gain
suggests the robust housing market may be cooling again,
according to data from the Teranet-National Bank Composite House
Price Index on Wednesday.

The index, which measures price changes for repeat sales of
single-family homes, showed overall prices rose 0.7 percent in
July from a month earlier, the fifth straight monthly gain but
on the low side of typical summer housing strength.

The index was up just 1.9 percent from a year earlier.
Though this was a slight acceleration from June, the 12-month
gains of these two months were the smallest since November 2009,
the report said.

The report echoes data on both sales activity and prices
that suggest Canada's housing market has recovered well after
the government tightened mortgage rules in July 2012, causing a
sharp slowdown in demand in the second half of 2012.

While some economists still predict a U.S.-style crash, a
spring recovery in sales has led some to believe Canada has
achieved a soft landing.

"Home prices have rebounded in tandem with the surge in
existing home sales in the spring. But despite the nascent
recovery in the housing market in recent months - which reflects
the typical dynamic of a temporary slowing following the
introduction of tighter mortgage regulations - we believe that
further upside in prices will be limited," Mazen Issa, Canada
Macro Strategist at TD Securities, said in a research note.

He said the recent rise in mortgage rates will reduce
affordability, limiting sales and slowing the rate of price
rises over the rest of 2013 and into 2014.
Continued...